Research On The Method Of Investment Project Financial Evaluation

Project evaluation is the revaluation work for project feasibility research report handed in that investment decision department or loan organization done. It mainly verifies and appraises the necessity, feasibility, rationality, benefit and the cost of the planning project.Project evaluation is playing an important role in the course of investment decision-making and its theory and method are developing more and more mature at present. In the west, investment project evaluation was formed along the route from financial evaluation to economical evaluation and then to social evaluation. Basing on the project feasibility research report, using social benefits, national economic benefits and commercial benefits of the project unit as benchmark, its practice is to make the decision of project investment and carry on the project system operating, resource distribution, value estimating, shade price making, etc. Until today, the evaluation of the financial benefit of the project has been a very important part. The financial benefit evaluation of the project is to judge investment project's feasibilities basing on the financial data of project investment, cost and income offered by financial preview and through analyzing and observing the financial situations of project. The target of financial benefit evaluation is the earning capacity, debt paying ability and foreign currency result of the project. And the purpose of financial benefit evaluation is to offer basis for project investment decision-making and bank loan decision-making. Financial feasibility is a most important content of project investment decision-making and an essential condition when the bank or other financial departments considers whether they should offer loan to the project. In the course of project evaluation, basing on the basic financial data offered by financial affairs predict and the result of evaluation about market and technology, it makes objective and just evaluation for the financial situation of project. It makes good help for the decision-making department and loan department to analyze the project investment synthetically and makes the correct decision.First of all, financial evaluation is the important basis of the enterprise to make the investment decision. No matter an enterprise carries on any production or operating activities, its purpose is to win income. And project financial evaluation can analyze the profit abilities of project in an quantitative way, and estimate the economic benefits that the project planned will bring to enterprise comparatively clearly. So, we make the investment decision according to the result of financial evaluation.Secondly, financial evaluation is the important basis of bank to make loandecision. The purpose of bank making loan decision is also to win income. So the bank must guarantee the loan can be regained. Especially the fixed assets investment, its loan has the characteristic of large number, big risk and long period. If we are careless, the investment of enterprise will fail, and the bank may not regain the interest on schedule, even can't regain the capital. So, the bank should analyze the feasibility and profitability of the project according to the result of financial evaluation in order to appraise the ability of credit repayment of the enterprise, and then make the loan decision.Moreover, financial evaluation is the important basis of department concerned to examine and approve the project planned. In our country, state-owned economy occupies a leading position. The financial situation of state-owned enterprise not only concerns the enterprise's own existence and development but also will exert an influence to the national fiscal revenues, because the investment loss of enterprise will be shifted to the country through the form of replenishing and write off etc finally. So, the department concerned should take the financial benefit quality as important basis when examine and approve and project planned.See that the important position of financial evaluation in the project evaluation, this di...